when will hecs debt be reduced

The HECS debt will be reduced by 20% for all student loans that existed as of June 1, 2025. This one-off reduction was legislated in 2025 and applies to HELP loans, VET Student Loans, and other student loan debts. The Australian Taxation Office (ATO) began processing this reduction gradually after the law passed, and most borrowers can expect the debt reduction to be applied by the end of 2025, although some complex cases may take until early 2026. Alongside this, the repayment threshold has been increased, making repayments fairer and lighter for low and middle-income earners. No action is needed from borrowers to receive the debt cut, and any overpayments post-reduction may be refunded.